Labor's Edge: Views from the California Labor Movement

Weakening of Unions is Directly Related to Exploding Inequality

“We have the best economy in the history of our country.” That’s what Donald Trump had to say about the state of America’s economy this week in Tampa, Fl. For the wealthy few and big corporations, that may well be true. For everyone else? Not even close.

Wages are stagnant, the middle class is shrinking, and the wealth gap is increasing at an alarming rate. In fact, the US ranks near the bottom of developed nations when it comes to income inequality and worker support. So how can an economy be considered strong when a large percentage of working Americans are struggling to keep their lights on and food on the table?

Trump and the right wing tout the lowest unemployment rates in decades, while praising the U.S economy. They’ve slashed taxes on the rich and promised corporate gains would trickle down to workers. But as working people would be the first to tell you, this is the furthest thing from the American reality.

A new report from the Organization for Economic Cooperation and Development (OECD) has declared our contradictory economic problem is not a hiccup, but the outcome of stagnant, and even decreasing wages.

“The low-income rate in the U.S. [defined as the share of the working-age population living with less than 50% of median household disposable income] is one of the highest in the OECD,” the report says. “The rate in the U.S. is 14.8% compared to an OECD average of 10.6%. The lowest rate is found in the Czech Republic at just 5.8%.”

So how did it get so bad in the U.S?

Well, the balance of power has been tilted in favor of the corporate elites for quite a long time. Our growing wealth gap stems from the dismantling of working people’s unions, curated by right-wing policy makers and wealthy donors. Unions have always been the pathway to the American Dream. It’s no coincidence that income inequality has escalated under the barrage of attacks on working people. Thankfully, there is a solution to save our working class from going under.

“That mechanism is called collective bargaining, and the new report (OECD) delves into it at length. There are great differences between how nations engage in collective bargaining. In some places, negotiations take place at the level of entire industries or business sectors; elsewhere, as in the US, unions representing workers engage primarily in bargaining at the level of individual companies (known as firm-level bargaining.)”

Unions are still raising the standards for all workers and bridging the gap of income inequality. It’s simple, really. When working people stand together, we have some power to fight against an economy rigged by the wealthy few. TheOECD report reiterates Nolan’s conclusion and outlines the effectiveness of working people standing together in a union:

“Workers are paid more with firm-level bargaining (also known as collective bargaining),” the report notes, “while sector-level bargaining is not associated with relatively higher pay on average.” It also finds that the greater the presence of unions, the happier the workplaces: “Employee representation at the workplace can play a significant role in improving job quality, in particular by reducing work intensity and increasing training opportunities and prospects for career advancements.”

The American middle class was built by working people standing together in a union and that is what is needed more than ever to create an economy in which prosperity is shared instead of all gains going to the wealthy elite. Sorry, Mr. Trump, but no corporate tax cut or giveaway to the rich will make our economy strong. Income inequality is directly connected to the weakening of collective bargaining. Unions are a fundamental building block for growing and stabilizing the economy. With strong unions, working people are able to demand our fair share. That’s what our country needs to create an economy renaissance that’s rooted in lifting up working people. No American should be struggling to survive while employed in this country.